Trump grants exemption to oil pipeline project partly manufactured by Welspun | world-news | Hindustan Times
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Trump grants exemption to oil pipeline project partly manufactured by Welspun

The Keystone XL pipeline, 60% of which is being made by Welspun India and Welspun, has been exempted from Donald Trump’s January directive to use only American-made steel in new, expanded or retrofitted lines.

world Updated: Mar 06, 2017 07:55 IST
Yashwant Raj
The Keystone XL project is a planned 1,179-mile (1,897km) pipeline — of 36-inch diameter — bringing oil from the oil sands of Alberta, Canada, to Steele City, Nebraska, in the US, where it would join an existing pipe.
The Keystone XL project is a planned 1,179-mile (1,897km) pipeline — of 36-inch diameter — bringing oil from the oil sands of Alberta, Canada, to Steele City, Nebraska, in the US, where it would join an existing pipe.(AP file)

Keystone XL oil pipeline, a long-running project killed by President Barack Obama and resurrected by President Donald Trump, has been exempted from his January directive to use only American-made steel in new, expanded or retrofitted lines.

A White House spokesperson said on Friday the waiver was granted because it’s an ongoing project — “ … since this one is already currently under construction, the steel is already literally sitting there; it would be hard to go back”.

Here is who is making it, most of it at least. Welspun India and its US arm Welspun will manufacture 10% and 50% respectively — total of 60% — of the US portion of the pipeline (660,000 tons of steel), according to an earlier media advisory from TransCanada Corporation, the energy company that owns the project, which remains unchanged. Evraz, a Canadian company, and Ilva from Italy, will do the rest, 24% and 16% respectively. Welspun India is a $3 billion multinational considered to be one of India’s fastest growing global conglomerates, Welspun, is its US arm based in Arkansas.

“Welspun has made significant investments into its steel pipe manufacturing facility in Little Rock Arkansas,” the Confederation of Indian Industry said in a statement to Hindustan Times. “As one of the early participants in the Keystone pipeline project, the clearance of the project will allow the Welspun to immediately deploy available resources and further ramp up investments in the Little Rock facility, further contributing meaningfully to the local economy and job creation.”

This could be good news and the way forward for Indians concerned about how to work with Trump’s America-First policy or Buy American, Hire American, which has appeared to some as posing a conflict with Prime Minister Narendra Modi’s Make in India push.

Asked about a potential conflict between the two competing visions, though not in the context of Keystone, Foreign Secretary S Jaishankar told reporters last week in DC, “I don’t see a contradiction because obviously every country would like to take steps would be in the best interest of their economy and the way global economy works is that countries reconcile those interests, either bilaterally or regionally or multilaterally or through an international trading system. Again I would say that if there is more robust growth in America I am unable to see how it can be of detriment to India in fact it can offer opportunities here.”

The Keystone XL project (also called KXL — XL stands for “export limited”) is a planned 1,179-mile (1,897km) pipeline — of 36-inch diameter — bringing oil from the oil sands of Alberta, Canada, to Steele City, Nebraska, in the US, where it would join an existing pipe. It’s the fourth phase of a project that was commissioned in 2010, and the rest of the pipelines are already in place and working.

Under unrelenting pressure from the Green lobby and in line with his drive towards clean energy President Obama turned down permission for the pipeline in November 2015 saying “shipping dirtier crude oil (from the oil sands of Alberta) into our country would not increase America’s energy security”, and in his administration’s estimation the project brought no real oil price benefits and did not create long-term jobs.

In his first week in office, Trump, who, like most Republicans, supported the pipeline, issued a presidential memorandum inviting TransCanada to apply, effectively overturning Obama. He said it will create 22,000 jobs. The Canadian firm re-submitted its application two days later.